Question

The following information relates to the investment income received by Ms. I. N. Vestor during 2018:...

The following information relates to the investment income received by Ms. I. N. Vestor during 2018:

(1) Eligible cash dividends received from taxable Canadian corporations:

​(a) Loewen Group Inc. ​ $ 150 (actual amount) ​

​(b) Toromont Industries Ltd. ​ ​ 960 (actual amount) ​

​(c) Agrium Inc. ​ 850 (actual amount)

(2) ​During 2018, Ms. Vestor received a stock dividend of 1,000 common shares from

​Cott Corporation, a Canadian public corporation. The total market value of these shares ​at the date of the dividend declaration was $500.

(3) On April 1, 2017, Ms. Vestor purchased a one-year Guaranteed Investment Certificate in the amount of $5,000 at an interest rate of 8.5 %.

(4) On August 5, 2018, Ms. Vestor purchased a 90-Day, $10,000 Treasury bill at a cost of $9,548.

(5) On December 1, 2018, Ms. Vestor purchased a five-year Guaranteed Investment Certificate in the amount of $10,000 at an interest rate of 7.75 %.

(6) During 2018, she purchased 100 common shares of Canadian Tire Acceptance Limited as a birthday present for her spouse. Her spouse received dividends from these shares in 2018 in the amount of $450 (actual amount).

(7) To assist her 19 year-old daughter with her university tuition payments, Ms. Vestor transferred to her daughter the right to receive the interest income from an Ontario Hydro Bond. Her daughter received $1,500 in interest from the bond in 2018.

​

(8) During 2018, Ms. Vestor received dividends from Boeing Inc., a U.S. corporation. The actual amount of dividends received in 2018, net of a 15% withholding tax, was $850 in U.S. currency. Assume that the average exchange rate for 2018 was $1.00 U.S. = $1.2986 Canadian.

(9) Ms. Vestor paid the following amounts in 2018:

​(a) Investment counsel fees ​ $ 615

​(b) Interest on funds borrowed to purchase a vehicle 1,500

​(c) Safety deposit box rental   

Required:

  1. Calculate Ms. Vestor's NET INVESTMENT INCOME for 2018.

  1. Calculate the federal dividend tax credit that Ms. Vestor will be able to claim on her 2018 tax return.
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